In Slovakia, Real Lottery Prize Goes to Tax Man

Think winning a lottery prize would be great? Well, when Jozef Lazarcik, a 35-year-old factory worker, heard his number called on national television here recently, he pumped his fists, hardly believing his luck. He had registered only nine receipts with Slovakia’s new tax lottery, and yet he had just won a new car. “It’s a heavenly feeling,” he said before leaving the studio, ready to encourage all of his friends to register their receipts, too — which is exactly what Slovakian officials were hoping for.

Over the last 10 years, Slovakia’s revenue from value-added taxes, a type of sales tax, has declined. But hiring auditors and pursuing individual merchants and service providers in court is expensive and slow. So last fall, the government decided to put any lottery prize winnings in the mix.

The idea is to enlist average citizens to collect receipts from their purchases and register them with the government, creating a paper trail for transactions and forcing restaurant and shop owners to pay the sales taxes they owe. As Slovakians register their receipts for the lottery, a computer will also tell them if a merchant has issued a receipt with a fake tax identification number, so they can report suspected fraud.

For any purchase worth more than 1 euro, or about $1.38, Slovakians can enter their receipts in a monthly drawing to win a €10,000 lottery prize, a car, or a chance to be a contestant on the Slovakian version of “The Price Is Right.”

Tax officials say the lottery is already having a big impact, and other European countries that are also struggling with the collection of value-added taxes have considered it — including Portugal, which started its own tax lottery on Thursday. In Slovakia, about 450,000 people have taken part, registering about 60 million receipts, officials said.